European Stocks, Commodities Drop on China GDP; Won Strengthens (Bloomberg)
2012-04-13 07:11:04.585 GMT
By Lynn Thomasson and Saeromi Shin
April 13 (Bloomberg) -- European stocks fell for the first time in three days, commodities slid and Australia’s dollar weakened as China reported slower-than-expected economic growth. Asian shares rallied and South Korea’s won strengthened after a failed rocket launch by North Korea.
The Stoxx Europe 600 Index retreated 0.5 percent as of 8:05 a.m. in London, while Standard & Poor’s 500 Index futures declined 0.3 percent. The MSCI Asia Pacific Index climbed 0.9 percent, the biggest gain in almost three weeks. Australia’s dollar lost 0.5 percent and the won rose against all 16 major counterparts. Ten-year Treasury yields fell two basis points to 2.03 percent. The S&P GSCI Index of 24 raw materials fell 0.3 percent and copper sank 1 percent.
China said its gross domestic product increased 8.1 percent in the first quarter, the smallest gain since mid-2009 and less than the 8.4 percent growth predicted in a Bloomberg survey. North Korea launched a rocket, which broke up and fell into the sea, in defiance of international pressure including U.S. warnings that doing so would nullify a food aid deal. Reports on U.S. consumer confidence and inflation are due later today.
“The market’s skew was definitely looking for a stronger number,” Jonathan Cavenagh, a Singapore-based currency strategist at Westpac Banking Corp., Australia’s second-biggest lender, said of China’s GDP figure. “The knee-jerk reaction has been to sell risk currencies,” including the Aussie dollar.

Earnings Season
JPMorgan Chase & Co. and Wells Fargo & Co. are scheduled to report earnings today and 91 companies in the S&P 500 will announce results next week. Per-share profit growth for companies in the U.S. equity benchmark is projected to have slowed to 0.8 percent in the first quarter, according to analyst estimates compiled by Bloomberg.
Infosys Ltd., India’s second-largest software services exporter, plunged 9.1 percent in Mumbai after forecasting sales that trail analyst estimates.
Taiwan’s Taiex Index rallied 1.6 percent, its best performance since February. The Nikkei 225 Stock Average rallied 1.2 percent, while Australia’s S&P/ASX 200 Index added 1 percent. All 10 industries in the MSCI Asia Pacific Index advanced. The regional equity gauge gained 0.2 percent this week.
The Hang Seng China Enterprises Index jumped 2.5 percent, the most in two months, and the Shanghai Composite Index gained 0.4 percent. Chinese lenders added 1.01 trillion yuan ($160.1 billion) of new loans in March, the most since January 2011, the central bank reported yesterday.

Fast Retailing, Sony
Fast Retailing Co. surged 8.6 percent in Tokyo for the biggest advance since 2009. Asia’s largest clothing retailer raised its annual profit forecast, saying record earnings will be driven by increased sales of Uniqlo apparel. Sony Corp. fell 5.5 percent. Japan’s biggest consumer-electronics exporter said it will cut 10,000 jobs.
The won gained 0.5 percent to 1,135 per dollar. South Korea’s central bank will closely monitor stocks, bonds and currency markets following North Korea’s rocket launch, Deputy Governor Park Won Shik said at an emergency meeting in Seoul.
The U.S. military said it tracked the rocket, which was “assessed to have failed” and fell harmlessly into the sea. North Korea state media confirmed the failure and said it was under investigation.
“Investors are just shrugging off this launch,” said Im Jeong Jae, a Seoul-based fund manager at Shinhan BNP Paribas Asset Management Co., which oversees about $28 billion. “The news came out before the market opened that the rocket launch failed, so investors didn’t have to worry about it.”

Bond Risk
The cost of insuring Asia-Pacific bonds from non-payment decreased, according to traders of credit-default swaps. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan fell five basis points to 161 basis points, Credit Agricole SA prices show. The gauge is on course for its lowest close since April 4 and biggest daily drop since March 15, according to data provider CMA.
Crude oil for May delivery retreated 0.5 percent to $103.10 a barrel in electronic trading on the New York Mercantile Exchange. Three-month copper dropped as much as 1.1 percent to $8,126 a metric ton on the London Metal Exchange.
The dollar headed for a weekly loss versus most of its major peers before data today forecast to show gains in U.S. consumer prices slowed, fueling speculation the Federal Reserve will keep an accommodative policy. The greenback traded near a six-week low against the yen on prospects Fed Bank of New York President William C. Dudley may reiterate that he supports a pledge to hold interest rates low through late 2014.
U.S. consumer prices rose 0.3 percent last month after climbing 0.4 percent in February, according to the median estimate of a Bloomberg News survey taken before the Labor Department releases the figure. The Thomson Reuters/University of Michigan’s preliminary index of consumer sentiment probably held at 76.2 in April, the highest since February 2011, projections show.

FOREX-Euro, Aussie fall after China growth data disappoints
TOKYO, April 13 (Reuters) - The euro and the Australian dollar eased on Friday after Chinese growth data disappointed traders already positioning for a strong showing, but other Chinese data came mostly in line with expectations, limiting the downside.
The currency markets showed no immediate reaction to news that North Korea's much hyped long-range rocket apparently crashed into the sea a few minutes after launch on Friday.

US wheat extends gains on cold weather, firm equities
SYDNEY, April 13 (Reuters) - Chicago wheat edged higher, building on the previous session's nearly 2 percent rally driven by cold weather threatening U.S. crop yields and optimism over global economic growth.
"Traders and analysts said it was too early to know how much, if any, damage was done by cold weather to the rapidly growing domestic winter wheat crop as well as the emerging corn and spring wheat crops."

Viterra sees bigger Canada canola plantings
WINNIPEG, Manitoba, April 12 (Reuters) - Canada's biggest grain handler, Viterra Inc , said on Thursday that Western Canadian canola plantings look to reach 20 million to 21 million acres this spring, smashing last year's record high of 18.5 million acres.
Farmers are set to expand canola's area due to the oilseed's high price and a return to dry spring conditions after two years of flooding that took millions of acres out of production, said Doug Wonnacott, chief operating officer of agri-products for Viterra.

Argentina soy crop estimate cut again-exchange
BUENOS AIRES, April 12 (Reuters) - One of Argentina's key grains exchanges cut its forecast for soy production on Thursday, saying the full extent of damage done to Pampas farm areas by a December-January drought is becoming clearer.
The harvest is now seen at 44.0 million tonnes in the 2011/12 crop year, down from a previous estimate of 45.0 million, the Buenos Aires Grains Exchange said, citing lingering effects of a six-week dry spell that parched hundreds of fields during the dog days of the Southern Hemisphere summer.

Brazil sugar crop struggles with drought, age-Unica
SAO PAULO, April 12 (Reuters) - Brazil's sugar cane sector expects the main center-south crop to yield 5.7 percent more sugar this season, as it grapples to reverse the effects of ageing crops and persistent drought that reduced the region's output last year, its first decline in more than a decade.
Sugar output from the center-south, which accounts for 90 percent of Brazil's cane, will reach 33.1 million tonnes this April-March season, up from 31.3 million last year, industry association Unica said in its first forecast of the season.

Frost, drought hit EU winter grain outlook-analyst
PARIS, April 12 (Reuters) - Analyst Strategie Grains on Thursday cut again its forecasts for winter grain crops in the European Union this year due to the impact of both frost and drought, raising the prospect of tight wheat supply in Europe next season.
The analyst lowered by 4.3 million tonnes its forecast of the EU's main soft wheat crop to 126.8 million tonnes, now putting production below last year's 129.1 million tonnes.

US natgas storage crunch may hammer prices by July
NEW YORK, April 12 (Reuters) - U.S. natural gas markets bracing for an autumn price crash caused by overflowing storage may be in for a shock this summer.
Some regions unable to cope with rocketing production are set to fill up by July, leaving a glut of stranded gas that could send already depressed prices into an unprecedented tailspin much earlier than expected.

COLUMN-Aluminium, who pays the price of success?
--Andy Home is a Reuters columnist. The opinions expressed are his own--
LONDON, April 12 (Reuters) - Aluminium sank to a fresh 2012 low on Tuesday, London Metal Exchange (LME) three-month metal closing at $2,065 per tonne. The last 24 hours have seen a minor bounce, although the words "dead" and "cat" spring to mind.
You don't need to be an analyst to appreciate the ugliness of the charts right now and unless the light metal can spring some sort of major upside surprise, and soon, technical funds will be massing to inflict further damage.

London copper falls after China GDP disappoints
SHANGHAI, April 13 (Reuters) - London copper fell nearly 1 percent after data showed China's economy grew slower than expected in the first quarter, reviving doubts about second-quarter demand from the world's biggest copper user.
"The GDP figure was low but not devastatingly so. Besides, other figures were better-than-expected. I'm pretty happy with the industrial output and fixed asset investment figures," said a Shanghai-based trader.

Australia to help Glencore/Xstrata stay ahead in zinc
MILAN, April 12 (Reuters) - Expansion of zinc mining operations in Australia will help mining group Xstrata and commodities trader Glencore to keep zinc market leadership after their planned merger, offsetting output cuts in Canada, a senior Xstrata manager said.
A full merger of Glencore and Xstrata, now before shareholders, will make the group the world's biggest zinc producer, with a controlled output of about 1.6 million tonnes and a 16 percent share of global zinc ore production.

Novelis to close aluminum plant in Canada
April 12 (Reuters) - Aluminum products maker Novelis Inc, which has cut its fiscal 2012 earnings estimate because of lower shipments and soft demand, will close its Saguenay Works in Jonquiere, Quebec.
The plant has 157 staff and production employees and makes aluminum coils to supply other Novelis facilities. It will cease production in August, said Novelis, the U.S. unit of India's HindalCo Industries Ltd .

China March crude steel output hits record
BEIJING, April 13 (Reuters) - China's crude steel output hit a new record in March, with mills responding to increasing prices as construction activities recovered from a winter lull.
Production reached 61.58 million tonnes in March, up 10 percent from February, data from the National Bureau of Statistics showed on Friday.

Eldorado sees rapid growth in gold output, shares jump
April 12 (Reuters) - Eldorado Gold Corp , the Canadian miner that recently acquired European Goldfields, expects its annual gold production to touch 1.7 million ounces within five years as it brings new mines into production.
The Vancouver, British Columbia-based company said on Thursday it plans to commission five new mines over the next few years, increasing its global footprint to 12 operations by 2016.

Indonesia's industry minister wants mining export tax soon
JAKARTA, April 12 (Reuters) - Indonesia should quickly impose a tax on mining exports, the industry minister said on Thursday in comments likely to worry miners in the world's top exporter of thermal coal and refined tin.
Government officials say a 25 percent tax on mining exports is being considered for this year and a 50 percent tax for next year, though miners and industry analysts have speculated that such plans are likely to be toned down.

China's copper demand seen picking up in September
HONG KONG, April 12 (Reuters) - China's demand for refined copper may revive by September as current heavy stockpiles are depleted and Beijing takes steps to boost the cooling economy, analysts and sources at copper products manufacturing plants said on Thursday.
China is the world's top copper consumer but demand has been lacklustre since January as the global economic slowdown weighs on its exports as Beijing continues to clamp down on the property sector, a major copper user.

India launches WTO case against U.S. steel duties
GENEVA, April 12 (Reuters) - India has launched a trade dispute to challenge U.S. duties on certain steel products, the World Trade Organization said on Thursday.
The WTO gave no details but said India had "requested consultations" with the United States - the first stage of a formal trade dispute - over U.S. countervailing duties

METALS-London copper falls after China GDP disappoints
SHANGHAI, April 13 (Reuters) - London copper fell nearly 1 percent on Friday after data showed China's economy grew slower than expected in the first quarter, reviving doubts about second-quarter demand from the world's biggest copper user.
But the relatively modest decline suggested investors were hoping that the slowdown in China, the world's No. 2 economy, would lead Beijing to roll out further monetary easing, while other better-than-expected Chinese data released on Friday also helped keep bearish sentiment in check.

PRECIOUS-Gold edges down after China data boosts dollar
SINGAPORE, April 13 (Reuters) - Gold edged lower on Friday after weaker-than-expected first-quarter growth data from China prompted a modest rise in the dollar, but the losses were capped as the slower growth fuelled the prospects for further monetary easing.
The world's second-largest economy experienced a fifth consecutive quarter of slowing growth in the first three months of 2012, with the gross domestic product reading at a lower-than-expected 8.1 percent.

As oil runs hotter, stocks could get burned
NEW YORK, April 12 (Reuters) - A $22 rise in the price of oil could be the difference between steady gains for U.S. stocks and danger signs for the market.
Rising U.S. oil prices, more often than not, are a positive for the stock market - but not always. A Reuters survey of 20 equity strategists over the last two weeks puts $125 a barrel as the point where warnings start to flash for stocks. Currently, oil trades at about $103 a barrel.

GLOBAL MARKETS-Shares up on Italy debt sale, shrug off N.Korea
TOKYO, April 13 (Reuters) - Asian shares rose on Friday on better-than-expected demand for Italian sovereign debt, shrugging off a rocket launch by North Korea before the market open that South Korean officials said had failed.
"The launch itself has very limited impact to broad financial markets," said Yuji Saito, director of the foreign exchange division at Credit Agricole Bank in Tokyo.

COMMODITIES-China growth hopes lift every market on CRB
NEW YORK, April 12 (Reuters) - All 19 commodities in a major index posted gains o n T hursday, as expectations of strong first-quarter growth data for China boosted prices of raw materials that depend largely on consumption by the world's No. 2 economy.
"Today's gains in crude stem from the strong gains in equities and the weakening of the dollar that raised investor appetite for oil and other commodities," said Chris Dillaman, analyst at Tradition Energy in Stamford, Connecticut.

OIL-Crude rises as China GDP talk lifts markets
NEW YORK, April 12 (Reuters) - Oil rose for a second straight day on Thursday as rumours that data will show strong growth in China's GDP boosted investor appetite in riskier assets across several markets.
"Today's gains in crude stem from the strong gains in equities and the weakening of the dollar that raised investor appetite for oil and other commodities," said Chris Dillaman, analyst at Tradition Energy in Stamford, Connecticut.

Oil market breaks two-year cycle of tightening supplies-IEA
LONDON, April 12 (Reuters) - The oil market has broken a two-year cycle of tightening supply conditions, the International Energy Agency said on Thursday, as demand growth weakens and top exporter Saudi Arabia increases output.
The agency, which advises industrialised nations on their energy policies, said increased supply and slowing demand growth might already point to a significant rise in global oil stocks. Stubbornly high oil prices could be expected to ease when markets woke up to the shift in trend, it added.

NATURAL GAS-US natgas futures end down despite light storage build
NEW YORK, April 12 (Reuters) - U.S. natural gas futures ended down slightly on Thursday, with the front-month contract hitting its fourth straight 10-year low despite a brief rally after a government report showed a weekly inventory build well below market expectations.
"Natural gas remains in a long term downtrend and nothing has changed to suggest this trend is on the cusp of changing. The only action that will make the trend change quickly is a significant cut in production," Energy Management Institute's Dominick Chirichella said in a report.

EURO COAL-Prices creep up, more U.S. coal offered
LONDON, April 12 (Reuters) - European physical coal prices rose by around 25 U.S. cents to $1.00 a tonne on Thursday in line with oil's gains on a weaker dollar but slightly higher prices drew out more offers of prompt U.S. cargoes, traders and utilities said.
"Bids and offers were 40-60 cents apart but nobody was prepared to move so little traded but prices have moved slightly higher and there are more U.S. offers," one trader said.

Maybank has hired former Citigroup executive Giles Ong to build its investment banking and advisory business. Ong was Citigroup’s head of mergers and acquisitions for South-East Asia before he left the US bank in December, and joined Maybank this week. (Bloomberg)

The final draft of the National Automotive Policy review is expected to be presented to the Cabinet soon, International Trade and Industry Minister Datuk Seri Mustapha Mohamad said Thursday. He said discussions with all stakeholders have been completed, and they were now compiling all the findings. (The Star)

Putrajaya backs JCorp debt refinancing
The Federal Government has thrown debt-laden Johor Corp (JCorp) a financial lifeline by guaranteeing a fundraising exercise that will help the state agency meet its immediate debt obligations. JCorp, the strategic investment are of Johor, announced that it planned to issue a sukuk wakalah Islamic finance instrument worth RM3bn to be directed at redeeming the state-owned corporation’s outstanding bonds worth RM3.2bn maturing at end-July. The guarantee, approved by the Cabinet, represents a major department from the Government’s treatment of loans by state agencies. (Financial Daily)

Johor's state investment arm Johor Corp (JCorp) and CVC Capital Partners Asia III are still pursuing the privatisation of QSR Brands Bhd and KFC Holdings (M) Bhd. In Dec-2011, JCorp and CVC Capital, via Massive Equity Sdn Bhd, announced their intention to buy QSR shares at RM6.80 each and RM3.79 per warrant. They also offered RM4 per KFC share and RM1 per warrant. "This is a complex buyout. It has taken longer than we anticipated as there are many parties involved. We need to abide by listing rules as it involves three listed entities; QSR Brands Bhd, KFC Holdings Bhd and Kulim (Malaysia) Bhd," said president Kamaruzzaman Abu Kassim. Asked if the United States-based Yum! Brands Inc, the licensor and owner of the KFC and Pizza Hut brandnames is happy with the privatisation plan, Kamaruzzaman replied, "They understand our proposal and are assured of further growth in the business. In fact, Yum! Brands sees this region as one of their most profitable." (BT) To another query on JCorp's financial health, Kamaruzzaman replied: "Our debt to asset ratio is 0.72x. The market no longer speculates on JCorp's solvency." He went on to say JCorp will issue a RM3bn sukuk wakallah with maturities stretching from 5-10 years to redeem existing bond obligations amounting to RM3.2bn, which will expire in end-July 2012. (BT) The federal government is guaranteeing this RM3.2bn sukuk wakallah that will help the state agency meet its immediate debt obligations. The guarantee, approved by the Cabinet, represents a major departure from government’s treatment of loans by state agencies. Typically, the federal government provides its backing for fresh loans taken by state agencies and shuns providing support for fundraising schemes directed at refinancing existing debt. Kamaruzzaman reasoned that the Cabinet’s guarantee is to ensure the state agency continues to spearhead development efforts in Johor. “JCorp has a combined role as a public enterprise, but more important is that JCorp has in the past until now played the developmental role of the Johor state. Over the years, we have gone beyond the state because of the interest of our businesses, especially the hospitals and food chains,” he said. (Financial Daily)

AmG buys Kurnia for RM1.5bn
AmG Insurance, the general insurance arm of AMMB Holdings, has wholly acquired Kurnia Insurans for RM1.5bn cash, making it the country's number one general and motor insurance firm. In a statement yesterday, AMMB directors said the purchase would elevate the company into becoming Malaysia's largest general insurer with over RM1.7bn in gross written premium. AMMB and AmG chairman Tan Sri Azman Hashim said the acquisition would enable AmG to achieve its objective of being among the top three domestic general insurers. "The combined businesses of AmG and Kurnia will see it emerge as the largest domestic general insurer and the market leader in motor insurance," said Azman. He added that this acquisition complemented AmBank Group's medium-term aspiration and strategic priorities of growing income from profitable segments. (BT)

MUI to dispose of insurance ops to Tokio Marine
Malayan United Industries (MUI) has proposed to sell the insurance assets and liabilities of MUI Continental Insurance Bhd (MCI) to Tokio Marine Insurans for a premium of RM180.23m. MUI told Bursa Malaysia that it had applied to Bank Negara for its approval of the proposed sale on 10 April. MCI is a 52.2% owned subsidiary of Novimax SB, which is a wholly-owned subsidiary of MUI. “The value of the insurance assets to be transferred to Tokio Marine shall be equal to the value of the insurance liabilities assumed by Tokio Marine as at the transfer date, to be determined,” said MUI. (StarBiz)

Axis Real Estate Investment Trust Buys industrial land, buildings for RM26.5m cash
Axis Real Estate Investment Trust (Axis-REIT) is expanding its portfolio of properties with the proposed acquisition of two parcels of indsutrial land with buildings in Labu, Negeri Sembilan, for RM26.50mil cash. Axis REIT Managers Bhd, the management company of Axis-REIT, yesterday said the 29,436 sq metres of land with tenure of 99 years expiring in September 2095, was acquired from LRS Property Sdn Bhd. The acquisition was undertaken by OSK Trustees Bhd, the trustee for Axis-REIT. Axis REIT Managers said the acquisition was to provide unitholders with stable distribution and to achieve growth in net asset value per unit of the fund. - StarBiz

Telekom Malaysia Bhd Proposes final dividend of 9.8 sen
Telekom Malaysia Bhd (TM) is proposing a final single-tier dividend of 9.8 sen per share for the financial year ended Dec 31, 2011. The company said in a filing with Bursa Malaysia that the dividend would go ex on May 22. The entitlement date would be May 24 subject to shareholders’ approval in the upcoming AGM on May 8, it added. - StarBiz

CIMB Group Bhd CIMB, RBS agree to collaborate
CIMB Group, which last week announced its acquisition of some Royal Bank of Scotland (RBS) assets in the Asia Pacific, has defined potential areas of collaboration with RBS in the region. The areas, as set out under a cooperation agreement inked by the two banking groups here yesterday, are capital market activities, mergers and acquisitions, equities, derivatives, loan markets, trade advisory and trade financing solutions, cash management services and agent/custodian bank arrangements. CIMB group chief executive Datuk Seri Nazir Razak said the agreement would allow both CIMB and RBS to leverage off each other in key Asia Pacific markets, adding that there is huge potential for cross referrals. – Business Times

Maxis Bhd Browse books via Maxis
Maxis Bhd, the country’s biggest mobile operator, launched its maiden digital books (ebooks) service to tap into the growth potential of the tablet computer industry. Sales of tablet computers like Apple iPad and Samsung Galaxy Tab grew by 500.0% in the fourth quarter of last year to 260,000 units. T. Kugan, Maxis vice-president and head of product, device, innovation and roaming said Maxis has recognised the shift towards digital content and with the launch of Maxis ebooks, they are looking at providing local readers with the hassle-free experience of browsing, purchasing and reading books on their tablets or PCs. About 31.0% of Maxis subscribers use devices like smart phones and tablet computers. The service is also expected to help the company grow its revenue, as Maxis takes a cut from the ebook purchases. While the exact amount Maxis will be getting was not revealed, it is understood that 70.0% of the sale will go to the publishers. The remaining 30.0% may be shared with its other technology partners. – Business Times

TNB back in the black
Tenaga Nasional (TNB) has posted its first quarterly profit after three consecutive quarters in the red. For its 2Q ended 29 Feb, the national utility recorded a net profit of RM2.82bn, almost 340% higher y-o-y. This was largely because of a RM2.02bn compensation paid to it by the Government and Petronas under a cost-sharing mechanism agreed to last year, following a shortfall in gas supply which crippled TNB's electricity generation and forced it to spend RM2.1bn to burn costly oil and distillates. It has also approved an interim dividend of 5.09 sen per ordinary share less income tax of 25%. (StarBiz)

MMC Corp Bhd has revised the allocation of offer shares under Gas Malaysia Bhd’s listing on Bursa Malaysia. The International Trade and Industry Ministry has informed that it has no objection for Gas Malaysia to revise the allocation of the offer shares between the institutional and selected investors and the eligible directors and employees. Under the revised offer, institutional and selected investors will receive 155.6m shares from 155.8m before while eligible directors and employees will be offered 4.8m from 4.6m before. (BT)

IOI Corp Bhd associate company Bumitama Agri Ltd closed 31.5% higher to S$0.98 on its debut on the Singapore Exchange. IOI Corp has a 30.4% stake in its Indonesian plantation associate. (StarBiz)

Tune Money expects to secure 1m customers for its AirAsia BIG Loyalty global reward programme this year. Tune Money CEO Peter Miller said the loyalty programme, which was launched last November, had 110,000 subscribers currently. “We plan to collaborate with every industry players to diversify our offerings to customers,” he said. (BT)

Kejuruteraan Samudra Timur Bhd has entered into a time charter agreement with Indonesia’s PT Duta Adhikarya to lease one set of drilling rig with accessories and parts for six consecutive months from January 2012 for a drilling project with Vico Indonesia in East Kalimantan Indonesia. Kejuruteraan Samudra directors said its wholly-owned subsidiary KST Drilling Technologies Sdn Bhd said there is no indication on the value of the contract in the award. (BT)

K-One Technology Bhd (K-One) sustained more than RM13m in damages after one of its factories in Silibin industrial estate, Ipoh, was gutted on Tuesday. The company said on Thursday the preliminary estimate of damages comprised of raw materials, work-in-progress, finished goods, own brand products, machines and building. However, the loss impact was mitigated by insurance coverage, it added. (BT)

Malayan United Industries Bhd (MUI) has proposed to sell its insurance arm MUI Continental Insurance Bhd. MUI said in an announcement to Bursa Malaysia that it is seeking Bank Negara Malaysia's permission to sell its general insurance assets and liabilities to Tokio Marine Insurans (Malaysia) Bhd for a premium of RM180.23m. However, it is unclear how the premium of RM180.23m was derived. (Financial Daily)

Golden Land Bhd plans to acquire a 95% equity stake in Indonesia's PT Tasnida Agro Lestari (TAL) for RM16.5m, which will double its oil palm plantation landbank to over 20,000 hectares from 9,683 hectares presently. The acquisition will provide the company about 10,810 hectares in south Kalimantan. About 837 hectares of this are planted areas. (Financial Daily)

Economic Planning Unit director-general Datuk Dr Rahamat Bivi Yusoff said that the government is studying the possibility of having unemployment insurance scheme next year to pave the way for better social safety net for the workers. (BT)

The Malaysian economy is expected to experience a small deceleration to 4.6% this year (5.1% in 2011) before picking up to 5.1% next year, said the World Bank yesterday. Factors in Malaysia's favour this year include a solid labour market with low unemployment and an expected acceleration of private investment from ETP projects. The federal government is likely to meet its budget deficit target of 4.7% of GDP this year (-5% in 2011) and 4% next year, it said. (Malaysian Insider)

PM Datuk Seri Najib Tun Razak and his British counterpart, David Cameron Thursday agreed that both countries have the potential to double bilateral trade to £8bn (about RM39.2bn) by 2016. "It’s an ambitious goal but we will try to work towards that," Najib said. Their discussions covered five vital areas, namely political and diplomatic relations, trade and investment, education and training, science, technology and environment as well as defence and security. In 2010, total trade between Malaysia and Britain stood at over RM13bn. (Bernama)

Indonesia: Extends pause in rate cuts
Indonesia’s central bank left its benchmark interest rate unchanged for a second month as inflation risks persist even after the government was forced to postpone an increase in subsidized fuel prices. Bank Indonesia kept the reference rate at 5.75%. Inflation in March rose for the first time in seven months, and lawmakers have rejected an immediate fuel-cost increase while giving the government power to act if Indonesian crude exceeds the budget assumption of $105 a barrel by 15% over six months. (Bloomberg)

Bank Indonesia expected the economy to grow 6.4% yoy in 2Q12, or slightly lower than the projected 6.5% for 1Q12. (Jakarta Globe)

A recent survey by the Japan Bank for International Cooperation ranked Indonesia as the equal fifth favorite investment destination in 2011, up from sixth in 2010. (Jakarta Globe)

Investors may have expressed concerns about Indonesia’s new mining regulations, but ratings agency Standard & Poor’s says it doubts the government will implement them strictly. (Jakarta Globe)

Philippine exports jumped 14.6% yoy to US$4.43bn in Feb, compared with a 3% gain in Jan. The median forecast was for a 1.7% increase. (Bloomberg)

The Asian Development Bank raised its voice against the rapid interest rate cuts of Vietnam, saying lowering interest rates too quickly would pose many risks, especially as inflation still stands at some 14%. (The Saigon Times)

Australia: Employers added more workers than forecast
Australian payrolls rose more than economists forecast in March, capping the best quarter since 2010, led by financial and manufacturing states Victoria and New South Wales. Payrolls rose by 44,000, almost seven times the median estimate for a 6,500 increase in a Bloomberg News survey of 24 economists. The jobless rate stayed at 5.2%, compared with expectations for a rise to 5.3%. (Bloomberg)

India: Factory output rises 4.1%
India reported a smaller-than-expected expansion in February industrial production and sprang a surprise by sharply slashing the previously reported January data, reviving worries that an economic upturn may not happen anytime soon. Industrial output rose 4.1% from a year earlier in February, missing the 6.6% median estimate in a poll of 15 economists, as manufacturing growth remained weak. For January, it revised the output growth number to 1.1% from 6.8%, blaming inflated sugar production data in the previous print. (Bloomberg)

Banks extended Rmb1.01tr in new yuan loans in Mar, compared with Rmb0.71tr in Feb, as China moved to bolster the economy by cutting banks’ required reserves and helping small companies get funding. Money supply growth (M2) quickened to 13.4% yoy in Mar (13% in Feb). (Bloomberg)

China: New yuan bank loans surge, point to easing
China's new yuan loans were the most in a year and money-supply growth quickened after Premier Wen Jiabao moved to bolster the economy by cutting banks' required reserves and helping smaller businesses get financing. Local-currency-denominated loans were CNY1.01tn in March, up from CNY710.7bn in February. M2, the broadest measure of money supply, grew 13.4% from a year earlier. Its foreign exchange reserves, the world's largest, rose to a record USD3.31tn as of 31 March after dropping for the first time in more than a decade in the fourth quarter. (Bloomberg)

China’s Entrepreneur Confidence Index (ECI) rose but the Enterprise Prosperity Index (EPI) declined in the first quarter of 2012. The EPI was 127.3, down 0.5 points from 4Q11. The ECI was 123, up 2.1 points compared to 4Q11. (People’s Daily)

China’s government State-owned enterprises have been ordered to stay out of financial investment and other non-core activities overseas in a move to improve regulation of outbound investment by SOEs. The order, effective May 1, came in a provisional regulation from the State-owned Assets Supervision and Administration Commission, which supervises about 110 central SOEs. (China Daily)

EU: Euro-area industrial output unexpectedly increased in February
European industrial production unexpectedly rose in February, led by France and Netherlands, adding to signs of economic stabilization after a fourth-quarter contraction. Production in the 17-nation euro area increased 0.5% from January, when it remained unchanged. From a year earlier, production decreased 1.8%. (Bloomberg)

UK: Trade gap widened as car exports to US and China dropped
UK trade deficit widened to the most in three months in February as exports of cars and heavy machinery fell, especially to the US, China and Russia. The goods-trade gap widened to GBP8.77bn from a revised GBP7.88bn in January. Exports fell 3.4 percent while imports were unchanged. (Bloomberg)

US: Trade gap narrows sharply in February to USD46bn
US trade deficit narrowed unexpectedly in February as exports hit a record high, imports from China and other key suppliers declined and oil import volume fell to the lowest in 15 years. The monthly trade gap shrank 12.4% to USD46.0bn, the biggest month-to-month decline since May 2009. Exports edged slightly higher to a record USD181.2bn, led by record exports of services and capital goods, such as civilian aircraft and industrial machines while imports dropped 2.7% to USD227.2bn, the biggest monthly drop in three years. (Bloomberg)

US: Unemployment claims rose to two-month high
More Americans than forecast filed applications for jobless benefits last week, reinforcing concern among Federal Reserve policy makers that the labour-market recovery will be slow to develop. Unemployment claims increased 13,000 in the week ended 7 April to 380,000, the highest since 28 Jan. (Bloomberg)

US: Stocks post biggest two-day rally in 2012 on Fed comment
US stocks rose, giving the S&P’s 500 Index its biggest two-day rally in 2012, on policymakers’ signals that interest rates will remain low. Commodity shares gained the most among 10 S&P 500 groups. The Dow Jones Transportation Average, a proxy for the economy, added 2.2%. Hewlett-Packard Co. surged 7.2%, the biggest advance since 2009, after Gartner Inc. said the global personal-computer industry grew in the first quarter as the company remained a market leader. Google Inc. added 1.8% as profit beat estimates. The S&P 500 advanced 1.4% to 1,387.57 rising 2.1% in two days. The Dow Jones Industrial Average climbed 181.19 points to 12,986.58. About 6.3 billion shares changed hands on US exchanges yesterday. (Bloomberg)

The US producer price index was unchanged on a mom basis in Mar (0.4% in Feb), less than consensus of 0.3%, whilst on core basis, the measure stood at 0.3% mom (0.2% in Feb), slightly above consensus of 0.2%. (Bloomberg)

The largest global banks would have needed an extra €485.6bn (US$639.5bn) in their core reserves to meet Basel capital rules had the standards been enforced last Jun. (Bloomberg)

The International Energy Agency said more than two years of steadily tightening oil market conditions appear to have reversed, just as sanctions reduce production in Iran by close to 10%, with global oil inventories boosted by as much as 1.2m barrels a day in 1Q12. (WSJ)

Europe's sovereign debt crisis and other economic shocks are expected to slow the growth in global exports to just 3.7% in 2012 (5% in 2011 and 13.8% in 2010), the World Trade Organisation (WTO) said yesterday in its annual report. The slowdown in 2012 would bring trade growth below the world average rate of 5.4% over the last 20 years, the WTO said. In 2013, the growth rate is expected to rise slightly again, to 5.6%, it forecast. (BT)

The World Bank cut its estimate for China’s expansion this year to 8.2% from a Jan projection of 8.4% as a sluggish world recovery damps export demand and domestic investment and consumption growth decelerate. However, it raised its 2013 growth forecast to 8.6% from a Jan estimate of 8.3%. China’s trade surplus may drop to 3.1% of GDP this year from 3.4% in 2011 while the current account excess will rise to 3% from 2.8%, according to the World Bank’s projections. Inflation in the nation this year will average 3.2% as growth slows, commodity-price “impulses” fade and the property market cools further, the report estimated. (Bloomberg)

Singapore's GDP grew 1.6% yoy in 1Q12 (3.6% in 4Q11), higher than consensus of 1.0%, according to advance estimates released by the Ministry of Trade and Industry. On a qoq basis, the measure grew 9.9% (-2.5% in 4Q11). (Bloomberg)

Asian Stocks Rise After N. Korea Rocket May Have Failed (Source: Bloomberg)
Asian stocks rose for a second day after South Korea and Japan said a rocket launch by North Korea today may have failed and Federal Reserve policy makers signaled interest rates will remain low. Toyota Motor Corp., Asia’s biggest carmaker, advanced 0.9 percent in Tokyo. Fanuc Corp., which supplies automation equipment to mainland factories, climbed 4 percent ahead of a report due today on China’s economic growth. BHP Billiton Ltd., Australia’s No. 1 oil producer and the world’s largest miner, rose 2.1 percent after crude prices advanced. The MSCI Asia Pacific Index gained 0.8 percent to 124.92 as of 9:40 a.m. in Tokyo, with almost five shares rising for each that fell. For the week, the measure was little changed after gains in the last sessions made up for earlier losses that came amid concern that Europe’s debt crisis has spread to Spain.
“North Korea is a pest we’ve gotten used to,” said Prasad Patkar, who helps oversee about $1 billion at Platypus Asset Management Ltd. in Sydney. “Markets see this as posturing rather than as a genuine threat.”

South Korean Won, Stocks Gain as North’s Launch Failed (Source: Bloomberg)
South Korea’s won rebounded from a three-month low and stocks rallied as the government said a rocket launch by North Korea probably failed. The won gained 0.6 percent to 1,133.45 per dollar as of 9:24 a.m. in Seoul, according to data compiled by Bloomberg. It touched 1,131.25 earlier, a one-week high. The Kospi stock index gained 0.9 percent to 2,004.51. North Korea fired the rocket from its Sohae Satellite Launching Station at about 7:39 a.m. today, South Korean Defense Ministry spokesman Kim Min Seok said at a televised press briefing in Seoul. The launch appears to have failed, South Korea and Japan said. “Investors are just shrugging off this launch,” said Im Jeong Jae, a Seoul-based fund manager at Shinhan BNP Paribas Asset Management Co., which oversees about $28 billion. “The news came out before the market opened that the rocket launch failed, so investors didn’t have to worry about it.”
The Standard & Poor’s 500 Index added 1.4 percent in New York yesterday as the U.S. policy makers signaled borrowing costs will stay low. Government bonds were little changed before the central bank’s monetary policy review today. The Bank of Korea will keep borrowing costs unchanged at 3.25 percent for a 10th month, according to all 13 economists surveyed by Bloomberg News. Results will be announced around 10 a.m. local time.

Japan Stocks Rise After Reports N. Korean Rocket Launch Failed (Source: Bloomberg)
April 13 (Bloomberg) -- Japanese stocks rose for a second day, paring weekly losses, after Japan and South Korea said North Korea’s rocket launch today may have failed. Shares also rose after the U.S. Federal Reserve signaled interest rates will remain low. Fast Retailing Co. (9983), Asia’s biggest clothier, jumped 6.9 percent after forecasting record profit. Toyota Corp., a carmaker that counts North America as its biggest market, rose 0.9 percent. Fanuc Corp., which provides robotics for Chinese factories, surged 3.9 percent added 1.1 percent ahead of a report due today on mainland economic growth. The Nikkei 225 Stock Average (NKY) rose 1.2 percent to 9,643.22 as of 9:24 a.m. in Tokyo, heading for a 0.5 percent drop this week. The broader Topix Index gained 0.8 percent to 816.10 with three stocks rising for each that fell.

S.Korean Stocks Rise as North’s Launch May Have Failed (Source: Bloomberg)
South Korea’s stocks rose for the first time in four days after the nation and Japan said North Korea’s rocket launch this morning may have failed. South Korea’s benchmark Kospi index gained 0.7 percent to 2,000.10 as of 9:30 a.m. Seoul time. North Korea fired the rocket from its Sohae Satellite Launching Station at about 7:39 a.m. today, South Korean Defense Ministry spokesman Kim Min Seok said at a televised press briefing in Seoul. The launch appears to have failed, South Korea and Japan said. “Investors are just shrugging off this launch,” Im Jeong Jae, a Seoul-based fund manager at Shinhan BNP Paribas Asset Management Co., which oversees about $28 billion. “The news came out before the market opened that the rocket launch failed, so investors didn’t have to worry about it.” The North has said the projectile was to carry a satellite into orbit as part of celebrations marking the centennial of state founder Kim Il Sung, and was not a long-range missile test in violation of United Nations sanctions.

U.S. Stocks Post Biggest Two-Day Advance in 2012 on Fed (Source: Bloomberg)
U.S. stocks rose, giving the Standard & Poor’s 500 Index its biggest two-day rally in 2012, on policymakers’ signals that interest rates will remain low. Commodity shares gained the most among 10 S&P 500 (SPXL1) groups. The Dow Jones Transportation Average, a proxy for the economy, added 2.2 percent. Hewlett-Packard Co. (HPQ) surged 7.2 percent, the biggest advance since 2009, after Gartner Inc. said the global personal-computer industry grew in the first quarter as the company remained a market leader. Google Inc. (GOOG) added 1.8 percent at 4:54 p.m. New York time as profit beat estimates. The S&P 500 advanced 1.4 percent to 1,387.57 at 4 p.m. New York time, rising 2.1 percent in two days. The Dow Jones Industrial Average climbed 181.19 points, or 1.4 percent, to 12,986.58. About 6.3 billion shares changed hands on U.S. exchanges today, or 8 percent below the three-month average.
“We have the ingredients for a better tone to the market,” said Keith Wirtz, who oversees $15 billion as chief investment officer for Fifth Third Asset Management in Cincinnati. “The bar was set low, we might have a good earnings season and a couple of Fed officials are providing some rhetoric. If there’s an erosion of economic conditions, it’s likely that we’re going to see action by the Fed.”

European Stocks Gain as Fed Signals Low Interest Rates (Source: Bloomberg)
European stocks climbed the most in more than a week, led by a rally in mining companies, after the Federal Reserve signaled U.S. interest rates will remain low to support economic growth. Rio Tinto Group and BHP Billiton Ltd. (BHP) climbed with copper amid speculation China may release a stronger-than-forecast gross domestic product figure tomorrow. Hays Plc (HAS) surged 8.9 percent after the recruitment company forecast profit will be near the top end of analysts’ estimates. Banco Espirito Santo SA (BES) lost 11 percent after saying it will sell shares. The Stoxx Europe 600 Index (SXXP) rallied 1.2 percent to 257.36 at the close of trading, the biggest gain since April 2. The gauge has retreated for three straight weeks amid mounting concern about the region’s debt crisis and as a U.S. report showed employers added fewer jobs in March than forecast.
“What we saw last week was just a correction,” said Morten Kongshaug, chief equity strategist at Danske Bank A/S in Copenhagen, who has an overweight rating on European equities. “The debt crisis remains my biggest worry, but first-quarter earnings have a lot of potential to calm investors, especially if they show European lenders are doing alright.”

Asia Shares May Be Volatile on North Korea Rocket Launch (Source: Bloomberg)
Asian share trading may be volatile today after North Korea fired a rocket in defiance of international pressure. Japanese and Australian stock futures rose ahead of the report of the rocket launch after Federal Reserve policy makers signaled interest rates will remain low. South Korea’s government “will closely watch financial markets and other developments,” Kim Yi Tae, director of the international finance bureau at the Ministry of Strategy and Finance in Seoul, said by telephone today. American depositary receipts of Toyota Corp., Asia’s biggest carmaker that counts North America as its No. 1 market, rose 0.8 percent from the closing share price in Tokyo. Those of Komatsu Ltd. (6301), Japan’s largest construction machinery maker that gets 23 percent of its sales in China, added 1.7 percent ahead of a report due today on China’s economic growth. ADRs of Woodside Petroleum Ltd. (WPL), Australia’s second-biggest oil and gas producer, climbed 0.9 percent as crude prices advanced.
Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring in June closed at 9,600 in Chicago yesterday, up from 9,540 in Osaka, Japan. They were bid in the pre-market at 9,600 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index added 0.6 percent today. New Zealand’s NZX 50 Index rose 0.6 percent in Wellington.

GLOBAL MARKETS-Euro, shares nervous ahead of Italian debt sale
LONDON, April 12 (Reuters) - The euro dipped against the dollar and European shares inched higher as nervousness grew ahead of an Italian debt sale that will gauge whether concerns over Spain are spreading to other debt-laden euro zone nations.
"Should the Italian auction disappoint, we could see the euro reverse some of its gains," said Ankita Dudani, G-10 currency strategist at RBS Global Banking, who expects the bond sale to go through without much of a hitch.

North Korea Launches Rocket in Defiance of Warnings (Source: Bloomberg)
North Korea defied international condemnation and launched a rocket today that may have failed minutes after liftoff, South Korea and Japan said. “North Korea’s missile appears to have fallen after breaking up into multiple pieces,” South Korean Defense Ministry spokesman Kim Min Seok said at a televised briefing in Seoul. He said the rocket was fired at about 7:39 a.m. local time today and flew for “several minutes.” South Korean President Lee Myung Bak called an emergency Cabinet meeting. The benchmark Kospi index rose as much as 0.8 percent, while the won gained 0.7 percent. North Korea’s government has said the projectile would carry a satellite into orbit to mark the April 15 centennial of state founder Kim Il Sung, and was not a long-range missile test in violation of United Nations sanctions. A botched launch may put pressure on new leader Kim Jong Un to repair the country’s image by conducting a nuclear test, which South Korea warned this week was likely.
“I’m not surprised the North Koreans launched and I’m not surprised it failed,” said James Acton, a senior associate in the nuclear policy program at the Carnegie Endowment for International Peace in Washington. “I will also not be surprised if, in the next few months, they test a nuclear weapon.”

FOREX-U.S. stock index futures signal early gains
U.S. stock index futures pointed to a higher open on Wall Street with futures for the S&P 500 up 0.55 percent, Dow Jones futures up 0.42 percent and Nasdaq 100 futures up 0.59 percent at 0734 GMT.European stocks inched higher in morning trade, although the gains were limited by simmering worries over the region's debt crisis ahead of a key bond auction by Italy, at which 3-year borrowing costs are set to rise by a full percentage point from a month ago.

Dollar Set for Weekly Loss Versus Peers Before Inflation Report (Source: Bloomberg)
The dollar headed for a weekly loss versus most of its major peers before data today forecast to show gains in U.S. consumer prices slowed, feeding speculation the Federal Reserve will keep an accommodative policy. The greenback traded 0.4 percent from a six-week low against the yen on prospects Fed Bank of New York President William C. Dudley may reiterate that he supports the central bank’s pledge to hold interest rates low through late 2014. The yen erased earlier gains after South Korea said the North attempted to launch a rocket today. Singapore’s dollar touched a one-month high after a rebound in economic growth prompted the central bank to tighten monetary policy to curb inflation. “Expectations for further easing are a factor that weighs on the dollar,” said Takuya Kawabata, a researcher at Gaitame.com Research Institute Ltd. in Tokyo, a unit of Japan’s largest currency-margin company. “Easing expectations have emerged in part because the U.S. recovery is slower than the Fed thinks it should be.”
The dollar was little changed at 80.90 yen at 9:31 a.m. in Tokyo, after sliding to 80.57 on April 11, the weakest since Feb. 29. It is set for a 0.9 percent drop this week. The U.S. currency fetched $1.3191 per euro from $1.3188, and has dropped 0.7 percent since April 6. Singapore’s currency climbed to S$1.2469 per dollar, the most since March 2, before trading at S$1.2477, or 0.5 percent higher than the close yesterday.

Unemployment Claims in U.S. Rises to Two-Month High (Source: Bloomberg)
More Americans than forecast filed applications for jobless benefits last week, reinforcing concern among Federal Reserve policy makers that the labor-market recovery will be slow to develop. Unemployment claims increased 13,000 in the week ended April 7 to 380,000, the highest since Jan. 28, the Labor Department reported today in Washington. The median forecast in a Bloomberg News survey called for 355,000 claims. Other reports showed consumer confidence held near a four-year high and the trade gap narrowed more than projected. The claims data, coming on the heels of last week’s weaker- than-forecast payroll number, raise the possibility that the job gains that drove unemployment down to a three-year low last month will moderate. Fed Vice Chairman Janet Yellen and Fed Bank of New York President William C. Dudley said over the past 24 hours that they support keeping the central bank’s main interest rate low through late 2014 to help reduce joblessness.
“There’s a modest recovery in the labor market, but still a ways to go,” said Michael Hanson, a senior U.S. economist at Bank of America Corp. in New York.

Yellen Says Jobs Outlook Warrants Accommodative Policy (Source: Bloomberg)
Two of the Federal Reserve’s top policy makers endorsed the central bank’s view that borrowing costs are likely to stay low through late 2014 as the Fed misses its goal for full employment and inflation remains in check. “I consider a highly accommodative policy stance to be appropriate in present circumstances,” Vice Chairman Janet Yellen said yesterday in a speech in New York. “I haven’t seen any set of information that should suggest to me we should change that view,” William C. Dudley, president of the Federal Reserve Bank of New York, said today in Syracuse, New York. Central bankers next meet in two weeks to debate policy for an economy that Dudley and Yellen said may be sapped by government spending cuts and the European debt crisis. An unexpected increase in claims for jobless benefits highlighted Fed concerns that the labor market is weakening after payroll growth in March was the slowest in five months.
At the same time, policy makers gave no sign that a third round of large-scale assets purchases, known as quantitative easing, is imminent, said John Ryding, a former Fed researcher who is chief economist at RDQ Economics LLC in New York.

U.S. Producer Costs Minus Food, Fuel Rise More Than Forecast (Source: Bloomberg)
Wholesale prices in the U.S. excluding food and fuel rose more than forecast in March, led by a pickup in the costs of light trucks and soaps. The so-called core producer price index climbed 0.3 percent after a 0.2 percent rise, Labor Department figures showed today in Washington. Economists projected a 0.2 percent gain, according to the median estimate in a Bloomberg News survey. The overall gauge was little changed after a 0.4 percent rise. Fuel costs advanced more slowly last month, supporting the Federal Reserve’s view that the recent surge in energy prices will be temporary. With diminished inflationary pressure from energy, producers will probably find less reason to pass expenses to consumers, who are facing slow income growth.
“Energy prices typically rise quicker than they did this particular month,” Kevin Cummins, an economist at UBS Securities LLC in Stamford, Connecticut, said before the report. “Looking at the overall trend for producers, there doesn’t seem to be any sign of a major pickup in finished good prices.”

Trade Gap in U.S. Narrows More Than Forecast as Imports Drop (Source: Bloomberg)
The trade deficit in the U.S. narrowed more than forecast in February as imports fell by the most in three years, reflecting the smallest amount of crude oil purchases in 15 years and a drop-off in demand for Chinese goods. The gap shrank 12 percent to $46 billion, the smallest since October, from a revised $52.5 billion in January, the Commerce Department in Washington said today. The median estimate of 73 economists surveyed by Bloomberg News called for a deficit of $51.8 billion in February. Purchases of foreign goods decreased by 2.7 percent, the biggest decline since February 2009. Exports barely rose to reach a record.
The Chinese Lunar New Year holiday may have contributed to the slump in imports, indicating demand will probably rebound as a strengthening U.S. labor market bolsters consumer spending. At the same time, sales overseas by American companies may moderate as parts of Europe stagnate and China slows, a sign international commerce will be less of a source of strength for the world’s largest economy. “As domestic demand begins to gain some momentum you should start to see imports pick up,” said Kevin Cummins, an economist at UBS Securities LLC in Stamford, Connecticut. “It appears that the drop in imports was reflective of the Chinese New Year. We’ve assumed slower export growth based on global growth slowing in 2012.” At the same time, he said, “it doesn’t appear that exports are likely to be a significant drag on the U.S. economy.”

Fed’s Dudley Says Jobs Report Damps Upbeat Economic Data (Source: Bloomberg)
Federal Reserve Bank of New York President William C. Dudley said the economy may be gaining strength even as the weakest job growth in five months highlights risks to growth. “The incoming data on the U.S. economy has been a bit more upbeat of late, suggesting that the recovery may be getting better established,” Dudley said, speaking to business leaders at the Syracuse Technology Garden in Syracuse, New York and repeated in an identical speech at Syracuse University later this morning. Yet “it is still too soon to conclude that we are out of the woods, as underlined by the March labor-market release,” he said, adding he still supports holding the Fed’s main interest rate close to zero through late 2014. The Federal Open Market Committee plans to meet April 24-25 to debate policy for an economy described as growing at a “modest to moderate” pace in the Fed’s Beige Book survey released yesterday.
Fed officials, mandated by Congress to achieve maximum employment, confront an 8.2 percent jobless rate that Dudle y, FOMC vice chairman, said is “unacceptably high.” Dudley said in response to an audience question that he agrees with the Fed’s March 13 statement backing low rates through at least late 2014. “I haven’t seen any set of information that would suggest to me we should change that view,” he said.

Treasuries Snap Loss on Speculation Price Gains Slowed (Source: Bloomberg)
Treasuries snapped a two-day loss before a government report that economists said will show the cost of living in the U.S. rose at a slower pace in March. Thirty-year Treasuries, among the most sensitive to inflation because of their long maturity, returned 2.7 percent this month as of yesterday, according to Bank of America Merrill Lynch indexes. The broad market returned 0.9 percent, the figures show. Treasuries didn’t respond to a rocket launch in North Korea. “The rally has further to go,” said Hiromasa Nakamura, who invests in Treasuries at Mizuho Asset Management Co. in Tokyo, which has the equivalent of $40.7 billion in assets. Consumer prices “will be subdued.” Benchmark 10-year notes yielded 2.04 percent as of 9:30 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2 percent security due in February 2022 changed hands at 99 5/8. Thirty-year bonds yielded 3.2 percent.

China’s New Yuan Loans Surge Ahead of Today’s GDP Report (Source: Bloomberg)
China’s new yuan loans were the most in a year and money-supply growth unexpectedly accelerated after Premier Wen Jiabao moved to bolster the economy by cutting banks’ required reserves and helping small companies get funding. Local-currency-denominated loans were 1.01 trillion yuan ($160.1 billion) in March, the People’s Bank of China said yesterday, the biggest surprise above forecasts in more than a year. M2, the broadest measure of money supply, grew 13.4 percent from a year earlier. China’s foreign-exchange reserves, the world’s largest, rose to a record $3.31 trillion as of March 31 after dropping for the first time in more than a decade in the fourth quarter. The report may reassure investors that the nation will avoid a deeper slowdown in economic growth. Government data due today are set to show gross domestic product probably expanded 8.4 percent in the three months ended March 31, the least in 11 quarters.
“Policy makers have taken preemptive measures to ensure the growth slowdown doesn’t become excessive,” said Dariusz Kowalczyk, a Hong Kong-based strategist at Credit Agricole CIB. “The message for the rest of the world is China will not have a hard landing and will generate demand for your exports.”

New Loan Surge Bolsters Stocks as Renren Climbs: China Overnight (Source: Bloomberg)
Chinese equities listed in New York posted their biggest daily jump in three months, buoyed by social media stocks, on signs looser monetary policy is already bolstering lending in the world’s second-largest economy. The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. climbed 2.5 percent to 103.76 yesterday in New York, the steepest gain since Jan. 10. Social network operator Renren Inc. (RENN) surged a five-month high while Sina Corp. (SINA), which runs a Chinese Twitter-like service, gained the most in a month as the prospect of an initial public offering by Facebook Inc. draws investors to companies in the same sector.
Chinese lenders added 1.01 trillion yuan ($160.1 billion) of new loans in March, the most since January 2011 and more than all 28 analysts surveyed by Bloomberg estimated, central bank data yesterday showed. The People’s Bank of China has lowered the amount major banks must set aside as reserves twice since November to spur lending as a global slowdown looms. Policy makers also doubled the amount foreigners are allowed to invest in China’s capital markets on April 4 to lure more investment. “There seems to be more liquidity coming into the system from things like more Chinese bank lending, and other measures they took recently,” Dave Lutz, head of exchange-traded fund trading and strategy at Stifel Nicolaus & Co. in Baltimore, said by phone yesterday. The increase in lending “is a piece of the puzzle, and the puzzle right now is acting like they’re easing. That’s typically very good for the stocks.”

Shirakawa Pledges Japan Easing Amid Political Pressure (Source: Bloomberg)
Bank of Japan Governor Masaaki Shirakawa pledged to continue to add monetary stimulus amid growing calls from politicians for the central bank to do more to end deflation. “The BOJ will pursue powerful easing” to help overcome deflation and put the economy on a sustainable growth path, Shirakawa said at a branch manager meeting in Tokyo today, reaffirming the stance. Stimulus measures announced Feb. 14 drove down the yen, aiding exporters. Ruling party lawmaker Tsutomu Okubo said yesterday further stimulus by the BOJ would weaken the yen more effectively than currency intervention, an indication politicians will continue to press the central bank to expand its asset purchases. The BOJ refrained from easing policy at the meeting on April 10, fueling calls from DPJ lawmakers including Takeshi Miyazaki for them to take “bold and large-scale” action later this month.
“It’s obvious that the central bank’s policies have more influence over the currency than intervention,” Okubo, a Democratic Party of Japan lawmaker, said in an interview in Tokyo yesterday, citing the yen’s depreciation of more than 4 percent against the dollar since the BOJ’s February decision.

India’s Industrial Output Rises Less Than Estimated (Source: Bloomberg)
Indian industrial production rose less than predicted in February as weaker overseas demand and the highest interest rates since 2008 curbed output, with January’s figure revised lower because of a data error. Production (INPIINDY) at factories, utilities and mines advanced 4.1 percent from a year earlier, the Central Statistical Office said in a statement in New Delhi today. The median of 36 estimates in a Bloomberg News survey was for a 6.7 percent gain. January’s reading was cut to 1.1 percent from 6.8 percent after an error was found in sugar output calculations, the office said. The Reserve Bank of India, which reviews policy on April 17, has signaled readiness to reduce borrowing costs to bolster domestic spending and counter export threats from easing Chinese expansion, slower U.S. jobs growth and Europe’s debt crisis. At the same time, the monetary authority has flagged inflation risks from oil prices, a weaker rupee and government spending.
“The central bank will cut interest rates next week, even though volatility takes away the efficacy of basing policy decisions on just this data,” said Prasanna Ananthasubramanian, an economist at ICICI Securities Primary Dealership Ltd. in Mumbai.

Indonesia Extends Pause in Rate Cuts as Price Risk Persists (Source: Bloomberg)
Indonesia’s central bank left its benchmark interest rate unchanged for a second month as inflation risks persist even after the government was forced to postpone an increase in subsidized fuel prices. Bank Indonesia kept the reference rate at 5.75 percent, Governor Darmin Nasution said at a press conference in Jakarta today. The decision was predicted by all 21 economists in a Bloomberg News survey. Policy makers cut the rate in February. Inflation in Southeast Asia’s largest economy accelerated in March for the first time in seven months, and lawmakers have rejected an immediate fuel-cost increase while giving the government power to act if Indonesian crude exceeds the budget assumption of $105 a barrel by 15 percent over six months. The central bank said today it will take steps to counter any temporary impact on price pressures.
“We expect Bank Indonesia to hold the policy rate at 5.75 percent for the time being, given the uncertainty over the fuel price hike and inflation,” Chua Hak Bin, an economist at Bank of America Merrill Lynch in Singapore, said in a note. “Monetary tightening via reserve requirement hikes and narrowing of the interest-rate corridor, rather than via the BI policy rate, is likely the preferred first course of action.”

Singapore GDP Rebounding Prompts Faster Currency Gains (Source: Bloomberg)
Singapore’s economic growth rebounded last quarter, prompting the central bank to unexpectedly tighten monetary policy by allowing faster gains in its currency to damp inflationary pressures. Gross domestic product rose an annualized 9.9 percent in the three months through March 31 from the previous quarter, when it dropped 2.5 percent, the Trade Ministry said in a statement today. The median of 12 estimates in a Bloomberg News survey was for a 6.8 percent gain. The Monetary Authority of Singapore, which uses the island’s dollar to manage inflation, said it will increase “slightly” the slope of the currency trading band and raised the inflation forecast for this year.
Singapore’s stance contrasts with Asian central banks from Indonesia to Thailand which have avoided raising borrowing costs in recent weeks even as the threat of inflation prompted them to end interest-rate cuts. The Singapore dollar is the region’s best-performing currency this year as investors bet the central bank will tolerate a stronger exchange rate to curb price pressures that it said was more persistent than expected. “The balance of risks has tilted firmly to inflation,” Wai Ho Leong, a senior regional economist at Barclays Capital in Singapore, said before the report. “Meanwhile, growth risks have lessened.”

ECB Seen Favoring Bond Buying Over Bank Loans as Crisis Deepens (Source: Bloomberg)
The European Central Bank will restart its controversial government bond purchases rather than offer banks another round of unlimited three-year loans as the sovereign debt crisis worsens, a survey of economists shows. Of 22 economists polled this week, 17 predicted the ECB will be forced to resume the Securities Markets Program (ECBCSMP), while only one forecast it will offer another batch of three-year cash. Nine said the central bank may consider shorter maturity loans of one or two years. “Market stresses will eventually force the ECB to restart the bond program, but it’s not imminent,” said Ken Wattret, chief euro-area economist at BNP Paribas in London, who participated in the survey conducted April 11-12. “Trying to get consensus on the council for it will be difficult.”
The bond purchases have split the ECB’s Governing Council, with German policy makers in particular arguing they blur the line between monetary and fiscal policy. The program was mothballed a month ago after the ECB’s 1 trillion euros ($1.3 trillion) of three-year loans reversed a sell-off in Italian and Spanish bonds that threatened to splinter the 17-nation euro region.

Lagarde Cuts IMF Funding Request as Economic Risks Abate (Source: Bloomberg)
International Monetary Fund Managing Director Christine Lagarde said she will scale down her request for $600 billion of additional resources as threats to the global economy diminish. “Some of the dramas that were envisaged at the end of 2011 or very beginning of 2012 not only have not materialized,” but some “good news” has “restored a little bit of confidence,” Lagarde said in Washington today. The IMF is reassessing risks, “which will bring me to probably reassess a lower number of additional resources needed.” Europe’s handling of its debt crisis has slowed Lagarde’s attempt to increase the fund’s lending power as countries including Brazil, China and Canada awaited more efforts to stem the turmoil before pitching in. While euro nations have pledged to pitch in 150 billion euros ($231 billion), the U.S., the fund’s largest shareholder, has refused to join in.
With European governments’ recent move to increase their crisis defenses, Lagarde said she hopes to make “real progress” on getting additional funding when the IMF’s 187 member nations meet in Washington next week. While data indicate economic improvement in economies such as the U.S., she singled out a worsening of the European debt turmoil as the largest risk to global growth.

U.K. Trade Gap Widened as Car Exports Dropped to U.S., China (Source: Bloomberg)
The U.K. trade deficit widened to the most in three months in February as exports of cars and heavy machinery fell, especially to the U.S., China and Russia. The goods-trade gap widened to 8.77 billion pounds ($14 billion) from a revised 7.88 billion pounds in January, the Office for National Statistics said today in London. The median of 18 forecasts in a Bloomberg News survey was for a deficit of 7.65 billion pounds. Exports fell 3.4 percent while imports were unchanged. Prime Minister David Cameron is in Asia this week, leading a trade and diplomatic mission seeking to boost commercial ties with the region. The government hopes exports can bolster the British economy as manufacturers cope with rising unemployment and inflation that’s reducing demand at home.
“Concern persists that U.K. exports will be limited in the near term at least by muted global growth,” Howard Archer, an economist at IHS Global Insight in London, said before the report. “Meanwhile, moderate domestic demand is likely to limit U.K. imports over the coming months.” Britain’s trade deficit with countries outside the European Union widened to 5.02 billion pounds in February from 3.72 billion pounds in January. Exports to those countries fell by 8.8 percent to 11.7 billion pounds.

Australian Employers Added More Workers Than Forecast (Source: Bloomberg)
Australian payrolls rose more than economists forecast in March, capping the best quarter since 2010, led by financial and manufacturing states Victoria and New South Wales. The local currency reached a one-week high. Payrolls rose by 44,000, a statistics bureau report showed in Sydney today, almost seven times the median estimate for a 6,500 increase in a Bloomberg News survey of 24 economists. The jobless rate stayed at 5.2 percent, compared with expectations for a rise to 5.3 percent. Reserve Bank Governor Glenn Stevens signaled last week he may end a three-month pause and resume lowering rates next month if weaker-than-forecast growth slows inflation, even as a pipeline of resource projects spurs hiring by companies including BHP Billiton Ltd. (BHP) to meet Chinese demand. Traders priced in 88 basis points of rate reductions in the next year after today’s data, down from 94 percent yesterday, a Credit Suisse Group AG index showed.
“Numbers like today are a bit of a reality check” on market expectations for the scale of rate cuts this year, said Su-Lin Ong, head of Australian economic and fixed-income strategy at RBC Capital Markets in Sydney. “I don’t think it changes the much bigger picture that the labor market is soft.”

Hong Kong Exchanges Said to Seek Loan for Potential LME Purchase (Source: Bloomberg)
Hong Kong Exchanges & Clearing Ltd. (388) is seeking an acquisition loan to back a possible bid for the London Metal Exchange, according to two people familiar with the matter. The loan may be as much as $3 billion, the people said, asking not to be identified because the details are private. Hong Kong Exchanges spokesman Scott Sapp declined to comment on the potential financing package when contacted by telephone at his office in Hong Kong today. The company owns and operates the city’s stock exchange, futures exchange and their related clearinghouses.
The London Metal Exchange, the world’s biggest metals trading platform, said on March 29 it is in the process of answering questions from bidders, which must submit offers for the 135-year-old bourse by May 7. The LME got preliminary bids from CME Group Inc., NYSE Euronext and IntercontinentalExchange Inc., three people with direct knowledge of the matter said in February. Hong Kong Exchanges also bid, the South China Morning Post reported at the time, citing two people it didn’t identify.

ICE Futures Expands CME Rivalry With Plan to Offer Grains (Source: Bloomberg)
IntercontinentalExchange Inc. (ICE) plans to offer futures and options in U.S. grains and oilseeds, expanding competition with CME Group (CME) Inc., the leader in agriculture products. Futures in corn, wheat, soybeans, soybean oil and soybean meal will debut May 14 on ICE Futures U.S., subject to regulatory review, Atlanta-based IntercontinentalExchange said today in a statement. The contracts will settle on a cash basis linked to prices on CME Group’s Chicago Board of Trade. Sugar, coffee, cocoa, cotton and orange-juice futures currently trade on IntercontinentalExchange’s electronic platform. ICE Futures U.S., formerly the New York Board of Trade, ended futures floor trading in early 2008. The Chicago- based CME Group, owner of the world’s largest futures market, offers both pit and electronic trading. The two companies also offer competing energy contracts.
“Customers over the past several months have approached ICE about providing an alternate execution and clearing venue for grain products currently listed exclusively on the CBOT,” Lee Underwood, an ICE spokesman, said in an e-mail. “We believe ICE will provide value to this market by offering an alternate pool of liquidity, similar to what we did for the energy markets almost a decade ago.”

Frost, drought hit EU winter grain outlook-analyst (Source: CME)
Analyst Strategie Grains on Thursday cut again its forecasts for winter grain crops in the European Union this year due to the impact of both frost and drought, raising the prospect of tight wheat supply in Europe next season.
The analyst lowered by 4.3 million tonnes its forecast of the EU's main soft wheat crop to 126.8 million tonnes, now putting production below last year's 129.1 million tonnes.

DTN/The Progressive Farmer: USDA Leaves Corn Stocks Unchanged; Cuts South America Soy Production (Source: CME)
Corn, Soybean and Wheat Production Reviewed both North and South
USDA cut Brazil and Argentina's soybean production, as traders expected, which ate into the global ending stocks estimates. USDA left U.S. ending stocks for corn unchanged, which came in at the high end of traders' expectations, while trimming domestic soybean and wheat ending stocks. Read this factual report on Corn, Soybean and Wheat production, and the market's reaction.

GRAINS-US wheat rises for 2nd day on cold weather, corn firm
SYDNEY, April 12 (Reuters) - Chicago wheat rose for a second straight day, supported by cold weather which is threatening the newly sown spring wheat in the United States and some of the more mature winter crop.
"Given where we've come off from in wheat, you could blame people for taking a little bit of risk protection in case it (cold weather) does occur," said Brett Cooper, a senior manager of markets at FCStone Australia.

Frost, drought hit EU winter grain outlook-analyst
PARIS, April 12 (Reuters) - Analyst Strategie Grains on Thursday cut again its forecasts for winter grain crops in the European Union this year due to the impact of both frost and drought, raising the prospect of tight wheat supply in Europe next season.
The analyst lowered by 4.3 million tonnes its forecast of the EU's main soft wheat crop to 126.8 million tonnes, now putting production below last year's 129.1 million tonnes.

Strategie Grains cuts winter crop outlook on weather
PARIS, April 12 (Reuters) - Analyst Strategie Grains on Thursday cut again its forecasts for winter grain crops in the European Union this year due to the impact of both frost and drought, and further raised its outlook for production of spring-sown maize.
The analyst lowered by 4.3 million tonnes its forecast of the EU's main soft wheat crop to 126.8 million tonnes, putting production 2 percent below last year's harvest.

Ukraine to export 23.5 mln T grain in 11/12 season-report
KIEV, April 11 (Reuters) - Ukraine will export 23.5 million tonnes of grain in the current marketing season which runs from July to June, Interfax news agency quoted Agriculture Minister Mykola Prysyazhnyuk as saying on Wednesday.
Prysyazhnyuk said the former Soviet republic had already exported 16 million tonnes of grain so far this season.

After the Bell: Wheat Futures (Source: CME)
Wheat futures were supported by spillover from neighboring pits, with Chicago and Kansas City posting slight to moderate gains. Minneapolis ended narrowly mixed. Funds bought an estimated 4,000 contracts of Chicago wheat today. Early support came on spillover from weakness in the U.S. dollar index, which sank on rumors 1st-qtr. GDP from China (to be released overnight) will be more robust than originally thought.

Wheat Market Recap Report (Source: CME)
May Wheat finished up 11 1/4 at 639 1/4, 6 1/2 off the high and 11 1/4 up from the low. July Wheat closed up 11 at 644 1/2. This was 11 up from the low and 4 off the high. May wheat closed sharply higher on the session but the market put in the highs of the day in the first 1/2 hour of trade. Fears that the overnight temperatures were cold enough to cause some damage in the eastern and southern Corn Belt helped to spark short-covering after the higher opening and a run to an early peak which was sharply higher on the day. Funds held a hefty net short position in the last COT report. A bullish tone to outside market forces and talk that US wheat will be competitive on the export market ahead added to the positive tone. Weakness in the US dollar and a surge higher in other grains, gold and energy markets helped to support. Net weekly export sales came in at 452,100 metric tonnes for the current marketing year and 90,400 for the next marketing year for a total of 542,500. As of April 5th, cumulative wheat sales stand at 96.5% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 94.3%. Sales of 116,000 metric tonnes are needed each week to reach the USDA forecast. Weather looks favorable for the central and southern plains ahead and there are also better rains for Europe in the forecast for next weekend. With good weather for planting ahead, Minneapolis July wheat closed slightly lower on the session. May Oats closed up 4 3/4 at 334. This was 4 up from the low and 1 off the high.

US wheat rises for 2nd day on cold weather, corn firm (Source: CME)
Chicago wheat rose for a second straight day, supported by cold weather which is threatening the newly sown spring wheat in the United States and some of the more mature winter crop. "Given where we've come off from in wheat, you could blame people for taking a little bit of risk protection in case it (cold weather) does occur," said Brett Cooper, a senior manager of markets at FCStone Australia.

After the Bell: Corn Futures (Source: CME)
Trimmed GainsCorn futures trimmed gains into the close to finish pennies higher in the nearby contracts. September corn ended steady, with new-crop ending 2 cents lower to 1/2 cent higher. Funds bought an estimated 5,000 contracts of corn today. Corn had plenty of news to pull support from this morning. The combination of a stronger-than-expected weekly export sales tally and help from positive outside markets returned buyers to the pit.

Corn Market Recap for 4/12/2012 (Source: CME)
May Corn finished up 1 1/2 at 637 1/2, 7 off the high and 1 up from the low. July Corn closed up 2 at 629. This was 2 up from the low and 6 off the high. May corn managed to close slightly higher on the session and December corn unchanged on the day as late selling drove the market down sharply from the early peak. Long liquidation selling emerged late in the day to pressure. The surge higher in wheat, fears that some of the early planted corn may need to be replanted and ideas that frosted corn which was not totally lost will still see slower development ahead helped to spark renewed interest in buying old crop corn early in the session today. Since the USDA is counting on August corn to avoid extreme tightness into September 1st, demand for May and July corn was stronger than buying in December. The very strong cash market, continued rumors of demand from China and solid weekly export sales added to the positive tone. Mid-day weather models were considered somewhat negative with less cold weather for the Midwest early next week and a shift to more rain for the western and northern sections of the Corn Belt which have been the driest. Net weekly export sales for corn came in at 959,100 metric tonnes for the current marketing year and 16,700 for the next marketing year for a total of 975,800 which was higher than expected. As of April 5th, cumulative corn sales stand at 81.1% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 76.4%. Sales of 383,000 metric tonnes are needed each week to reach the USDA forecast. Traders see wet weather in the next 3-4 days as a factor which could slow plantings but warmer and drier weather beginning in the middle of next week should help keep corn plantings on a record fast pace. May Rice finished up 0.43 at 15.365, equal to the high and 0.165 up from the low.

Corn, Wheat Advance as Freezing Weather Threatens Crops (Source: Bloomberg)
Corn climbed for the first time this week and wheat gained as freezing weather threatened crops in the U.S., the world’s largest shipper of both grains. Soybeans also rose. Temperatures dropped as low as 26 degrees Fahrenheit (minus 3.3 degrees Celsius) in eastern parts of the Midwest overnight, Telvent DTN said. About 17 percent of the corn crop in Illinois, the largest U.S. grower after Iowa, had been planted as of April 8, ahead of the previous five-year average of 1 percent, Department of Agriculture data show. “Freezing temperatures across the U.S. Midwest may have damaged emerging corn crops, according to U.S. weather forecasters,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia (CBA), said in a report e-mailed today. “Supporting values were concerns that cold temperatures may have damaged U.S. wheat crops.”
July-delivery corn advanced 0.3 percent to $6.2875 a bushel on the Chicago Board of Trade by 1:14 p.m. London time, after dropping 4.7 percent in the previous three days. Wheat futures for July delivery gained 0.6 percent to $6.3725 a bushel. The benchmark Chicago wheat contract primarily reflects the soft, red winter-wheat grown in the Midwest. In Paris, November-delivery milling wheat gained 0.4 percent to 202.50 euros ($266.35) a metric ton on NYSE Liffe, after dropping 1.5 percent the previous two days. Wheat-growing areas in most of Europe had “much needed rain” last week, the Kenilworth, England-based Home-Grown Cereals Authority said in a report yesterday. Rains may persist across areas of France, Spain, Germany and the U.K. in the next five days, according to AccuWeather Inc. “There are rains in France, and this could push prices lower,” Arnaud Saulais, a broker at Starsupply Commodity Brokers, said by phone from Nyon, Switzerland.
Soybeans for delivery in November gained 0.7 percent to $13.68 a bushel in Chicago.

Sugar Traders Extend Longest Bear Streak Since ‘07: Commodities (Source: Bloomberg)
Sugar traders are bearish for a seventh consecutive week, the longest stretch since at least 2007, on prospects for the first supply glut in four years. Sixteen of 22 analysts expect raw-sugar prices to decline next week and one was neutral, according to Bloomberg’s weekly sentiment survey that began in April 2007. Global production will exceed demand by 10 million metric tons in the 12 months ending in September, equal to about a year of U.S. consumption, according to Singapore-based Olam International Ltd., which trades and processes commodities in 65 countries. Prices that surged to a 30-year high in February last year spurred farmers to plant more cane and beet, expanding global production to a record this season. Futures traded in New York slumped 10 percent in the past three weeks on mounting concern about another glut next season. Thailand, the world’s second- biggest exporter, may ship the most supply ever this year, the country’s Office of the Cane & Sugar Board said this week.
“We have a surplus this year and it looks like we will have another one next year and that is more bearish than we initially thought,” said John Stansfield, a senior analyst at Olam in London. “The last time the glut for two consecutive years was so big, prices were significantly lower.”

SOFTS-Sugar steady before Brazil data, cocoa dips
LONDON, April 12 (Reuters) - Raw sugar futures were little changed in early trade with dealers awaiting the release of the first 2012/13 centre-south Brazil output forecast by industry group Unica, which is expected later in the day. May raw sugar on ICE was up a marginal 0.06 cent or 0.25 percent at 24.01 cents a lb at 0839 GMT. On Tuesday, front-month futures eased to 23.80 cents, the lowest level in almost one month.

World 2011/2012 coffee output seen down 2.4 pct y/y-ICO
HANOI, April 12 (Reuters) - World coffee production in the current 2011/2012 crop year will fall 2.4 percent to nearly 131 million bags mainly due to lower production following adverse weather in key growing regions, the International Coffee Organization (ICO) said.
The estimate by the London-based organisation in its March report seen by Reuters on Thursday is slightly higher than its earlier forecast in February.

Brazil cocoa arrivals slip due to Easter break
SAO PAULO, April 11 (Reuters) - Deliveries of cocoa from Brazil's main producing state Bahia and other regions slowed in the last week due to the Easter holiday and poor weather conditions in growing areas in the north of the country, the Bahia Commercial Association said.
Cumulative arrivals from the start of the season on May 1, 2011 are down 3 percent from the prior season at 3.82 million 60-kg bags. Higher imports of beans compensated for a drop in overall output this season in the two annual harvests.

Brazil sugarcane gets needed rain, more looms
SAO PAULO, April 11 (Reuters) - Rain fell over nearly all of Brazil's main center-south sugar cane region over the past week, alleviating much of the crop stress stemming from dry weather in March, local meteorologists Somar said on Wednesday.
Brazil's 2012/13 cane crop that begins harvest in April is forecast to recover from last year when output declined for the first time in 11 years due to bad weather and a lack of replanting. The government on Tuesday estimated Brazil's sugar output would grow 5 percent this season.

Views diverge before Europe, US cocoa grind data
NEW YORK, April 11 (Reuters) - Forecasts for upcoming first-quarter grind data, anticipated by the cocoa industry as an indicator of demand in Europe and North America, range more widely than usual amid uncertainty about global economic forces and processing rates in top-grower Ivory Coast.
The diverging views on whether cocoa grinding rates will rise or fall in the Northern Hemisphere reflect the uncertainty surrounding the strength of demand for cocoa, the primary ingredient in chocolate, which has traditionally been considered a recession-proof consumer product.

DJ US Cotton Exports Register Net Cancellations For Second Week (Source: CME)
NEW YORK (Dow Jones)--Export sales of U.S.-grown cotton were canceled for the second week in a row, the U.S. Department of Agriculture said Thursday. It was the first time since August 2011 that the U.S., the world's top cotton shipper, registered net cancellations two weeks in a row for the upland variety of the fiber. In the week ended April 5, the U.S. had net sales cancellations of 53,600 bales, mostly from China, which had been the main factor in net cancellations of 143,700 bales the week before. Analysts said it was a sign that the China's cotton-stockpiling program was winding down. The program, which began last year after cotton prices pulled back from record highs, has helped prop up the cotton market in recent weeks. "My guess is that it was possible that the cotton had to be on board [a ship headed for China] by March 31," said independent cotton analyst Mike Stevens.
Last week, the USDA forecast global supplies by the end of the 2011-12 season to reach a record 66.07 million bales. But it said more than one-third of that will be in China. "The government of China's accumulation of cotton in the national reserves is constraining free supplies, thereby boosting its imports while limiting consumption," the USDA said. But the consistent cancellations are bringing back memories of the effects of last year's sharp price swing. By the end of 2011, front-month cotton on ICE Futures U.S. had dropped nearly 60% from the record high of $2.27 a pound hit in March of that year.

After the Bell: Cotton Futures Boosted by Dollar Weakness (Source: CME)
Cotton futures were boosted by dollar weakness today, with futures ending 87 to 169 points higher -- with nearbys leading gains. The U.S. dollar index weakened sharply today as talk surfaced China's 1st-qtr. GDP will come in at 9% -- more lofty than expectations for 8.4% growth for the data to be released overnight.

Oil Trades Near Week High on Central Bank Stimulus Signs (Source: Bloomberg)
Oil traded near the highest price in more than a week in New York after central bank officials in the U.S. and Japan indicated they will use monetary policies to stimulate their economies. Futures were little changed, heading for a second weekly gain. Federal Reserve Vice Chairman Janet Yellen and William C. Dudley, president of the Federal Reserve Bank of New York, endorsed the view that borrowing costs will stay near zero through 2014. The Bank of Japan (8301) “will pursue powerful easing” to overcome deflation, according to Governor Masaaki Shirakawa. Iran’s crude output may drop by as much as 950,000 barrels a day by July as embargoes take effect, the International Energy Agency said. Crude for May delivery was at $103.81 a barrel, up 17 cents, in electronic trading on the New York Mercantile Exchange at 9:22 a.m. Sydney time. The contract yesterday increased 94 cents, or 0.9 percent, to $103.64, the highest close since April 3. Prices are 0.4 percent higher this week.
Brent oil for May settlement gained $1.53, or 1.3 percent, to $121.71 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s premium to New York-traded West Texas Intermediate closed at $18.07.

Brent steady above $120 as growth worries ease
SINGAPORE, April 12 (Reuters) - Brent crude held steady above $120 as a weaker dollar helped recoup losses made earlier in the day, while comments from the U.S. Federal Reserve and the European Central Bank eased worries about growth in oil demand.
"The overall expectation is that Europe would be able to manage this crisis," said Tetsu Emori, a Tokyo-based commodities fund manager at Astmax Investments. "The ECB has measures that it can take. If you look at Greece, all its problems may not be over, but the region is taking measures to tackle them."

Oil market fundamentals easing, IEA says
LONDON, April 12 (Reuters) - Increased output from OPEC coupled with sluggish demand could see the oil market turn a corner, the International Energy Agency (IEA) said on Thursday.
The combination of these factors had led to a potential global build in stocks of 1 million barrels over the last quarter, the agency said in its monthly report.

Russia on self-help drive to stop spending oil profits
MOSCOW, April 12 (Reuters) - Russia's commitment to economic reform will soon be tested by a plan to place its fragile public finances on a stable footing - primarily by weaning them off the ups and downs of the global oil market.
Various proposals are being floated, but the main idea is to cap the amount of money energy-rich Russia can spend from its oil profits, saving windfalls instead.

Saudi hikes oil output 100,000 bpd to 10 mln bpd
SEOUL, April 12 (Reuters) - Top oil exporter Saudi Arabia has hiked output to around 10 million barrels per day (bpd) in April, up about 100,000 bpd on the month, and the country's oil minister said on Thursday the kingdom would pump more if needed.
Output of 10 million bpd would be the highest since November, when the kingdom pumped more than it had done for decades.

CME Group Cuts Silver, Copper, Palladium Futures Margins (Source: Bloomberg)
CME Group Inc. (CME) cut margins for silver and copper futures on the Comex and palladium on the New York Mercantile Exchange. The amount that speculators must keep on deposit for an initial account in silver futures was reduced 13 percent to $18,900 from $21,600, CME Group said today in a statement on its website. Silver prices tumbled after the Chicago-based CME boosted margins 84 percent in two weeks from late April to early May. The copper margin was cut to $5,400 from $6,750, and palladium was reduced to $5,225 from $5,775.

Top Analysts See Copper Rising Even as China Slows: Commodities (Source: Bloomberg)
The third consecutive annual copper shortage and accelerating U.S. growth will drive prices to the highest in a year in the next quarter, according to the most accurate forecasters. Supply will fall 278,000 metric tons short of demand in 2012, more than North America uses in a month, Barclays Capital estimates. Hedge funds, which were betting on lower prices as recently as January, are now the most bullish in eight months, Commodity Futures Trading Commission data show. The metal will average $9,000 a ton in the third quarter, 9.5 percent more than now, according to the median estimate of the top five analysts in Bloomberg Rankings in the past eight quarters.
Copper is rebounding from a 21 percent slump in 2011 as data showed a strengthening U.S. economy and as European leaders moved to contain the region’s debt crisis. North America and Europe account for 29 percent of demand, Barclays estimates. While China cut its growth target to the lowest in eight years last month, the world’s biggest copper buyer will still be expanding at more than twice the global pace predicted by the International Monetary Fund. “The U.S. economy is pretty good,” said James Paulsen, the chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $333 billion of assets. “Emerging markets should start to pick up. Some time by the end of the year we may look back at commodity prices in general and copper in particular and say this was a good time to buy.”

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